Low-budget living not easy

Stanton Peele

Doomsayers have been prematurely announcing the collapse of the American lifestyle for decades. But it is hard to confront New Jersey's current plight with anything but alarm.

Gov. Jon S. Corzine is trying to reduce spending by 10 percent in his $33 billion budget to avoid adding to New Jersey's existing $32 billion debt. Looming beyond this debt is the $50 plus billion of unfunded obligations to the state's retirees. Corzine was elected in this blue state as a liberal Democrat with strong economic bona fides -- he is a former co-chairman of Goldman Sachs -- in part to confront this impending crisis.

Corzine has been selling a plan to raise half this debt and obligation by increasing highway tolls 50 percent every four years from 2010 to 2022. He thought this idea was saleable since it spreads the economic hardship to the many drivers from outside New Jersey who travel its roads. He is reconsidering, however, after getting an ear-full from residents around the state. Meanwhile, Republicans opposing the plan have been joined by leading Democratic legislators.

Of course, the easy answer everyone offers is to cut state spending instead. Corzine is proposing to do that along with raising new revenues.

"Frankly," he announced, "New Jersey has a government its people can't afford," including both prosperous suburbanites as well as large inner-city pockets in the state.

But residents and politicians don't like this step either. Corzine's recent speech to the Legislature announcing budget cuts met with no interruptions for applause. For one thing, reducing spending by $500 million won't lower taxes. In fact, the reverse will be true. Grants to towns would decrease by about $200 million (10 percent). Who will make up that shortfall?

Obviously, Corzine, who was elected in 2005, didn't cause the deficit. This was produced by previous Democratic and Republican governors (notably Christine Whitman and Jim McGreevey) who failed to fund ballooning state pension and health care costs, along with other government largesse.

In response, Corzine proposes to eliminate three departments and 3,000 state employees. State unions, which, after all, represent many long-time residents trying to make ends meet themselves, are furious.

"Clearly the governor's attack on public employees as a way to balance this budget is wrong," said Republican Bill Baroni from Mercer County, a district with many state employees.

Meanwhile, drivers face longer lines at state Motor Vehicle Commission outlets -- a Jersey hot button. And what will be the impact of cutting funding to state universities by $76 million and to hospitals by $144 million? These institutions will still need to meet their expenses. Since they are not particularly good at cutting services, principally because of consumers' objections, they must then raise their rates.

New Jersey's finances are as bad as any state in the country (although the current Arizona and California percentage deficits are larger). But its plight is not unusual.

How well will New Jerseyans and other Americans react to a reduced standard of living -- at least that part funded publicly? They may undergo serious withdrawal due to what Corzine calls "cold-turkey therapy for our troubled spending addiction."

And, on Monday, the state Senate voted for employee leaves to care for sick family members. Who can be against that? But it costs real money. This good and compassionate act will add to the crushing debt New Jerseyeans pass to their children.

Indeed, even Corzine can't face his own tough-minded prescription. He sought additional hundreds of millions in bonding for stem cell research, which voters rejected, as high-minded as the effort was. He continues to set aside tax revenues to fund local property tax rebates, which residents love.